Almost a quarter (23%) of businesses paying the apprenticeship levy has no understanding of how it works – six months after its introduction.
56% of more than 1,400 firms surveyed by the British Chambers of Commerce (BCC) did not expect to recover their payment, despite receiving an annual allowance to offset against the bill.
As of 6 April 2017, employers with an annual wage bill of more than £3 million must pay the levy towards apprenticeship funding. This levy is charged at 0.5% of the annual wage bill.
Each employer receives an annual allowance of £15,000 to offset against their levy payment, with the aim of increasing the number of apprenticeships.
However, 66% of businesses polled either did not take any action to access the funds or knew nothing about the apprenticeship levy.
Jane Gratton, head of business environment and skills at the BCC, said:
“Firms need greater flexibility on how they can use their levy payment and a system that is fully operational as quickly as possible, is simple and efficient, and enables them to access good quality training.”
Paying the levy
If you have to pay the apprenticeship levy, you need to report the amount due to HMRC.
Reporting is completed monthly using the Employment Payment Summary, which includes the annual allowance allocated to the PAYE scheme and amount of levy owed to date.
You also need to hold records of information used to calculate your levy payment for at least three years after the tax year it relates to.
We can talk you through the apprenticeship levy. Contact Sue Stephens.